Putting a Value on Provenge
Applying this 65% to the total AIPrC patient pool gets me to a total number of eligible Provenge patients. I estimate that number to be 49,823 in 2007, growing to 61,930 in 2012.
Marketing a new drug is not like turning on a light in a darkened room -- results aren't immediate, and not every eligible patient will take a drug, for a variety of reasons. Again, calculating a penetration rate, or market share, is a mix of art and science. In the real world, the best drug with the best marketing will likely top out at 80% market share.
In this case, I start Provenge at a 2% market share because approval, if it happens at all, would come late in 2007. This is a new kind of therapy for cancer and until additional clinical data is gathered and disseminated, I think some doctors might be reluctant to try it. For these reasons, I have peak market share topping out at 55%. I hate to repeat myself, but this is fairly conservative modeling.
In my model, then, I assume 996 Provenge patients in 2007, growing to 34,062 patients in 2012.
Product PricingNext consideration is pricing. Dendreon hasn't publicly discussed its thinking on Provenge pricing, but various analysts and commentators have pegged the price in the range of $20,000 to $45,000 a year. I'm using a $30,000 annual price (with a 4% hike per year) in my model, which is in line with other targeted cancer therapies. That gets us to the end: My 2007 Provenge sales estimate is just under $30 million, rising to $1.24 billion in 2012. Now, at the top I said my peak sales forecast for Provenge was $1 billion. The lower, final estimate results from the average of three revenue models, each looking at the Provenge market in a slightly different way. I don't always build multiple sales models, but in this case -- given all the unknown variables -- I thought it prudent. Here's model No. 2:
Prostate cancer - Revenue Model 2
|% patients failing hormone Tx||85%||85%||85%||85%||85%||85%||85%|
|Total AIPrC patients||50,968||52,497||54,072||55,694||57,365||59,086||60,858|
|% patients choosing immunoTx||65%||65%||68%||70%||72%||75%||75%|
|Eligible Provenge patients||33,129||34,123||36,769||38,986||41,303||44,314||45,644|
Prostate cancer - Revenue Model 3
|Annual prostate cancer deaths||27,000||27,540||28,091||28,653||29,226||29,810||30,406|
|% patients choosing immunoTx||0%||25%||50%||65%||75%||80%||90%|
|Eligible Provenge patients||0||6,885||14, 045||18,624||21,919||23,848||27,366|
|Average of three models||$34,001,575||$151,688,306||$304,628,034||$593,434,528||$825,344,018||$1,002,845,025|
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